Chrysler Bankruptcy Will Void Any Recall Responsibilities
Chrysler Bankruptcy Will Void Any Recall Responsibilities
By Ross EdwardsFriday, May 22 2009 12:25
In addition to no longer honoring lemon law debts, Chrysler vehicles sold before the company entered bankruptcy will not be the responsibility of the new company if there is any major defect that would normally require a recall. Chrysler will honor minor warranty claims, but any serious defects on vehicles sold before the company entered bankruptcy protection will not be the responsibility of the new company, according to ABC News.
According to consumer advocacy groups, this will leave 10 million vehicle owners with cars and trucks that, in the event of a massive defect, they will be personally responsible for.
This also includes people injured by faulty Chrysler products, like Farbod Nourian, who was interviewed by ABC News. Nourian suffered back injuries when a Jeep Grand Cherokee slipped out of park and ran him over. He is suing Chrysler to cover his tens of thousands of dollars in medical bills.
Vehicle recalls are a common occurrence nowadays. Even the most reliable cars and trucks sometimes have a manufacturing defect that isn’t discovered until years after the vehicle leaves the factory. Usually, the carmaker replaces the parts free of charge. Sometimes, such as in the case of the recent Toyota Tacoma frame-rust, the company buys back the vehicles at a very fair price (Toyota offered owners 1.5 times the blue book value of their trucks).
The point is that customers expect a company to stand behind its product, even after the normal warranty expires, and a car company’s reputation stands on its willingness to do that.
ABC points out that this will lower the already dismal resale value Chrysler vehicles have. How can you expect someone to buy a car when the manufacturer refuses to accept responsibility for any potential life threatening defects?
Logo via Chrysler.
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Comments
10 comments on this story so far.Your local dealership outside of the manufacturers warranty will use underwriters as well. Big difference being in most cases your so called dealership warranty is only valid at their dealership. Where will you be when that dealership goes out of business, do you really think they're going to tell you they're in trouble?
I looked up the info on Dealers Warranty, almost all issues have been resolved, and far less than most other companies. It seems they can't change the rating due to not being accredited . Where would Chrysler stand with the BBB? Great business practices there, I don't know exactly what it means when a company goes out of business after accepting billions of dollars,? Maybe they're a SCAM too?????????
http://www.msnbc.msn.com/id/22425001/vp/30364192#30364192
US Fidelis does not appear to be an underwriter as they are the ones under investigation. Also this type of insurance does not appear to be regulated at all so I would not dare to compare this to other types of auto insurance. And BTW I have never heard of an auto insurance company refusing to pay a claim unless they thought it was fraudulent, in which case the state attorney would be contacts the insured not the insurer.
Also any privately owned business can refuse service to anyone they wish. After service is rendered they are only obligated by law to accept US cash as payment. (But I think she is saying the dealership would never endorse the other warranty companies...but I doubt they would refuse their money.)
Finally, it is for a court to decide what will be paid after a bankruptcy filing...that is why you have to file it. The buyout will also have to go through the courts and part of that should involve the courts again deciding what the obligations of the new company will be.